News

756,000 interested in buying online news

The potential market for selling news and other information content online in New Zealand is up to 755,900 adults.

If each spent $10 per month online content sales could earn more than $90 million a year.

This potential revenue from charging for online content comes not only from people who do not read newspapers or use their online websites now, but also from those who read either their online or print products. Current readers/users choosing to pay for online content could contribute, at $10 per month per customer, up to $53 million a year of the total potential revenue.

Adults prepared to pay for online content will also each buy more than one category of information.

Horizon Research says the studies it has done on potential sale of news content online indicate that the major media companies, like NZME and Fairfax, and others have significant opportunities.

These include tailoring specialist content to readers’ interests, supporting printed newspaper sales by allowing some free online content, and creating opportunities for advertisers to reach more finely targeted audiences based on their interest in a range of information they are prepared to pay for.

The research shows there are ways to respond and adapt to the market disruption being caused by a shift to using free news content online, while advertising revenues grow for non-content creators like Facebook and Google. The Commerce Commission has turned down an application from NZME and Fairfax to merge as one way for them to address these issues.

Horizon’s research finds, when asked what they would do if news on the web were available only if you paid for it, a nett 19% of adults said they were prepared to pay for online content – equivalent to around 620,100 New Zealand adults. If each person who was prepared to pay paid an average of $10 per month, revenue would be $74,412,000 per annum.

If a newspaper allowed some free clicks before they had to pay for other news, a nett 23.5% of adults said they were prepared to pay for online content – equivalent to around 755,900 New Zealand adults. If each person who was prepared to pay paid an average of $10 per month, revenue would be $90,708,000 per annum.

Those who are prepared to pay for web news only tend to be younger than the national adult average. Those who would pay if a print subscription was included were slightly older than average and have personal income 5% below the national adult average.

If a newspaper allowed some free clicks before online users had to pay for other news, more people said they would be prepared to pay. Allowing some free clicks brought in more older readers but also increased the average income of those who are prepared to pay for online access.

Cross readership market opportunities

Among those who are not reading print or online newspapers there is also new business to be had:

58% of newspaper readers said they did not use the online services provided by the newspapers. However, 23% of these print-only readers said they would be prepared to pay for on-line content. That appears to be potential new business.

Similarly, 41% of online users said they did not read print newspapers. It is not costing them anything now, but 13% of them were prepared to pay for content. Again, that appears to be potential new business.

Based on the numbers or readers/users in the survey (i.e. as at June 2015) this total additional business, if everyone who paid for content paid $10 per month, would be equivalent to around $41.8 million in revenue – from existing customers or users.

Add in some free clicks before users had to pay for content and the percentages – and potential new business - rise:

Of the 58% of newspaper readers who said they did not use the online services provided by the newspapers, 30% would be prepared to pay for content.

Of the 41% of online users who do not read newspapers in print form, 15% would be prepared to pay for content if they had some free clicks included in a package.

Based on the numbers or readers/users in the survey (i.e. as at June 2015) and assuming everyone who paid for content paid $10 per month, the total addtional business from charging for online content but allowing some free clicks with other content paid for could be equivalent to around $53.5 million in revenue – from existing customers or users.

National, local and world news were the most likely information to be paid for. People with higher than average personal incomes were more likely to be interested in business and technology than other groups.

Horizon says print media will also need to adjust content they are providing to address New Zealanders’ concerns over its relevance, appeal and credibility.

New Zealanders’ majority opposition to the now declined merge application is polled here.

They also have some advice for media managers and this study indicates only 9% find their newspapers and magazines totally credible.

For further information on this research please contact Grant McInman, Manager, Horizon Research